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Technology and growth stocks led declines in premarket trading,
with megacap names including Alphabet Inc, Apple Inc, Amazon.com,
Microsoft Corp and Tesla Inc all down more than 1% as benchmark
Treasury yields were at an 11-year high.
The U.S. central bank raised rates by a widely expected 75 basis
points on Wednesday and signaled a longer trajectory for policy
rates at a time when a handful of companies - most recently
FedEx Corp and Ford Motor Co - are issuing dire outlooks for
earnings.
All the three major indexes closed lower for the third straight
session on Thursday, and are tracking sharp weekly losses on
fears that the Fed's hawkish move could tip the U.S. economy
into a recession.
"The likelihood of a U.S. recession in 2023 is increasing given
the hawkish Fed. While it is widely understood that earnings
estimates are too high given such recession risk, the market is
unlikely to be able to look through falling earnings," Citigroup
said in a note.
Goldman Sachs cut its year-end 2022 target for the benchmark S&P
500 index by about 16% to 3,600 points, a 4.2% decline from
current levels.
At 6:51 a.m. ET, Dow e-minis were down 351 points, or 1.16%, S&P
500 e-minis were down 47.25 points, or 1.25%, and Nasdaq 100
e-minis were down 161.25 points, or 1.39%.
Meanwhile, Fed Chair Jerome Powell is set to give opening
remarks on the transition to the post-pandemic economy at an
event at 2 p.m. ET.
On the data front, investors will closely monitor flash reading
on business activity data from S&P Global at 09:45 am ET.
The CBOE volatility index, also known as Wall Street's fear
gauge, rose to 28.55 points.
Costco Wholesale Corp shed 3.5% after the big-box retailer
reported a fall in its fourth-quarter profit margins, while
battling higher freight and labor costs on rising inflationary
pressure and global supply chain snags.
(Reporting by Ankika Biswas and Devik Jain in Bengaluru; Editing
by Shounak Dasgupta)
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